Wednesday possibly higher

The Hoot 
Actionable ideas for the busy trader delivered daily right up front

• Wednesday higher, low confidence.
• ES pivot 1377.17.  Holding above is bullish..
• Rest of week bias uncertain technically.
• Monthly outlook: bias down.
• ES Fantasy Trader standing aside.

Recap

Last night I was as confused about where today might go as I've ever been.  Turns out the bulls romped to a 194 point gain in the Dow.  Who knew?  And the SPX and Nasdaq gained even more, percentage-wise.  Is there more to come?  Let's take a look at the technicals.

The technicals

The Dow: After three days of trying, the Dow finally reclaimed the 13K line to close at 13,115 on a very tall green candle.  With no resistance until 13,250 and rising indicators, a further move up is not out of the question. 

The VIX:  Today the VIX fell 5.58% on a hammer-type candle.  This move was predicted by the futures, as I suggested lat night.  Today the futures moved lower again, so we could be in line for further declines in the VIX on Wednesday, an encouraging sign for the market.


Market index futures: All three futures are in the green at 1:52 AM EDT with ES up 0.14%.  This is encouraging after today's tall green candle.  Nevertheless, ES did not have the sort of breakout move over resistance that the Dow had today.  Instead it closed right at the top of its recent trading range.  But with rising indicators and a lack of selling pressure, it's possible that the way is cleared for further gains - if we can break above 1386.

ES daily pivot: Tonight the pivot rises from 1366.58 to 1377.17.  We were above the old number by so much that even with ES just wandering around we're still over the new pivot, and that's a good sign.

Dollar index: At least this chart worked.  Yesterday's dark cloud cover did result in a dollar that retreated 0.13% today..  But it left us with a spinning top in the Twilight Zone, that gray area half way between the upper and lower BB's.  This one could go either way Wednesday.

Transportation: With today's decent 1.44% gain, the $TRAN is now established in a rising RTC.  That said, it stopped just short of resistance at 5315.  However, its indicators are still rising, though giving signs of slowing down.  At this point, it looks like there's at least still a bit more room to run, though tomorrow will be critical.  We need to see a close above 5315 in order to continue higher.


History: According to The Stock Traders Almanac, Wednesday is historically not quite as good as today but bullish nonetheless.

Sentiment: Once again it's time for the latest weekly TickerSense Blogger Sentiment Poll.  We continue to track the poll to see how well it performs.  Here's the updated cumulative list for this year:

Wk.# Week   % Bullish  % Bearish  NightOwl SPX  Accuracy

  1  1/3        46         21        +     1258   1/1

  2  1/9        56         37        +     1278   2/2

  3  1/17       41         33        +     1289   3/3

  4  1/23       46         32        +     1315   4/4

  5  1/30       48         31        +     1316   5/5

  6  2/6        56         30        +     1345   6/6

  7  2/13       48         31        +     1343   7/7

  8  2/21       44         32        +     1361   8/8

  9  2/27       48         24        +     1366   9/9

 10  3/5        43         26        +     1370  10/10

 11  3/12       46         32        +     1371  11/11

 12  3/19       46         29        +     1404  11/12

 13  3/26       39         29        +     1397

 14  4/2        42         21        +     1408

 15  4/9        25         46        -     1398

 16  4/16       26         48        -     1370

Again, the SPX number is the closing price of the S&P on the Friday before each new poll comes out.  The "NightOwl" column is how I voted.  Since the poll is for 30 days out, after the first four weeks we're able to see how well we did.  This week we see that my bullish call on 3/19 was, for the first time this year, wrong, the S&P now being lower than then.  I'm using the column "Accuracy" to track my calls.  So now I'm 11 for 12.  And of course that means that since I voted with the majority back then, the poll as a whole was also incorrect that week.  This also means that the Ticker Sense bloggers' winning streak is now broken at 11.  Still, 11 for 12 isn't bad.


This week we see that both bullish and bearish sentiment increased just a bit, as more fence-sitters came off the sidelines.  So the ratio remains essentially unchanged.  While 48% bearish sounds pretty bad, it's still not really at the sort of extreme level that would qualify as a contrarian bullish indicator.  For the time being anyway, the bearish monthly thesis remains intact.  And for what it's worth, I voted bearish again this week.  I'm still seeing the monthly SPX chart as having more downside than up.


Accuracy: 

Today I have to add a third column to this section to handle those instances where I'm unable to make a call for the next day.  Since that means I'm neither right nor wrong, we now have a column labelled "No Call".
 

Month right  wrong  no call

April   5      3      1

     And the winner is...

I'm just vaguely feeling that we could move higher again on Wednesday, but I'm not confident enough to stake an ES trade on it right now.  Nevertheless, I'll call for a higher close Wednesday.  I'm just seeing more positives than negatives here tonight.

ES Fantasy Trader

Portfolio stats: the account remains at $130,125, after 30 trades (23 wins, 7 losses) starting from $100,000 on 1/1  Tonight we stand aside again.  Reminder - you can now follow these entries and exits live on Twitter @nightowltrader.